Eco-innovation in

Czech Republic

EIO Country profiles 2010

April 2011

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Eco-Innovation Observatory

The Eco-Innovation Observatory functions as a platform for the structured collection and

analysis of an extensive range of eco-innovation information, gathered from across the European

Union and key economic regions around the globe, providing a much-needed integrated

information source on eco-innovation for companies and innovation service providers, as well as

providing a solid decision-making basis for policy development.

The Observatory approaches eco-innovation as a persuasive phenomenon present in all

economic sectors and therefore relevant for all types of innovation, defining eco-innovation as:

“Eco-innovation is any innovation that reduces the use of natural resources and decreases the

release of harmful substances across the whole life-cycle”.

To find out more, visit www.eco-innovation.eu

Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect

the position of the European Commission.

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Eco-Innovation Observatory

EIO country brief 2010:

Czech Republic

Author: Filip Cejka

Coordinator of the work package: Technopolis Group Belgium

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Part 1. Introduction: innovation and environment in Czech Republic

Since 2006 - after a period of volatility at the turn of the 20th and 21st century - the quality of the

environment in the Czech Republic has been gradually improving (MoEnv CR, 2009). This positive trend

was accompanied in 2008 by decline in energy production and production in some branches of processing

industry caused by the ingoing global financial crisis. Despite the overall improvements there are still

serious and adversely changing ecological loads, whose impact - although it is usually territorially bounded

– causes deterioration of the environmental quality and greater risks for human health and ecosystems.

The continuing growth of the road transport causes deterioration of air quality in densely populated

conurbations and close to busy roads. Moreover the road transport cause adverse trends in greenhouse

gas emissions.

The nature of environmental problems in Czech Republic are gradually changing, the main potential for

improving the status and decrease the ecological loads shifts from the production to consumption areas.

The main themes for the coming period should be energy saving in the housing and private non-

manufacturing sector, the ongoing change in the energy mix for power generation and domestic heating

and reducing the impact of road transport on the environment. During the economic crisis and decline in

economic output in 2009 was expected a further reduction of environmental loads from the main economic

sectors except transportation, where the situation remains precarious.

Innovations & eco-innovations are associated with major environmental issues, environmental policy

enforced by the environmental legislation, and adopted strategies. From this point of view the Czech

Republic is fully compatible with EU Member States.

Major environmental and other related problems of the Czech Republic are at the same time the most

adequate areas. These can be grouped in case of Czech Republic as follows (2010, Študent):

Air:

- in 1990s all the major energy sources in Czech Republic have been modernized and desulphurised ,

there was a significant reduction of SO2 emissions and in particular a reduction of greenhouse gases

emissions

- the biggest problem remains the particulate matter in the air, being produced mostly by transport, local

heating and in two regions by the heavy industry.

- higher levels of ground-level ozone - the impact of transport, especially during the summer months, or a

seasonal pattern

- greenhouse gases – the Czech Republic fulfils the Kyoto commitments; further reducing of CO2

emissions depends on the development of energy management

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Water:

- wastewater and industrial wastewater – solved by the wastewater treatments; adopted the commitment

that each municipality of more than 2,000 inhabitants will be connected to the wastewater treatment

- eutrophication problem - a solution to this problem means that the existing technology must be

expensively upgraded – big potential for R&D

- focus on flood protection measures – these must lead to bigger retention of rainfall in the landscape

(concerning the agriculture, forestry, infrastructure, crisis management etc.

Energy:

- Energy performance of industry – dealt by modernization, restructuring and saving measures

- Elimination of the negative aspects of renewable energy sources especially from windmills from

Germany and Denmark

- The creation of international networks - allowing international trade of energy to be addressed in

a European context.

Czech Republic will be among the leaders in the field of photovoltaic power for 2010, however this

development came along with controversial consequence. Unfortunately the system of renewable

energy subsidies was designed in a disputable way, as a real threat of rising the price of electric

energy for the end users have occurred. The system was not able to respond to the technology

development which means that the significant decrease in photovoltaic plants investment costs was

not accompanied by decrease in subsidies. This issue had to be managed by special taxation of the

photovoltaic energy and unfortunately worsened the reputation of the RES in the Czech Republic.

Additional issue has been the emergence of many vast PV fields, which are in fact disfiguring the

landscape. This aspect is also perceived by the general public very adversely. A similar problem of

uncontrolled growth could emerge in the use of biomass for energy purposes and for heating. It is

expected that this boom would create an undesirable increase in the prices of biomass for industrial

purposes (paper industry and wood processing industry). In addition, a significant portion of biomass

is already exported to neighbouring countries. To avoid described possible problems regarding use of

biomass for energy purposes and the biomass price consequences, the government is preparing an

amendment of 482/2005 Decree, considering legitimate concerns of relevant stakeholders. (The

Ministry of Environment, Ministry of Industry and Trade, Energy Regulatory Office and Ministry of

Agriculture are working on the draft amendment in cooperation.)

Other related issues affecting the extent of (eco)innovations and thus the environment are related to

the quality and structure of the education system, securing the R&D at the academic level (which

significantly affects the competitiveness), population ageing and other problems.

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Part 2. Eco-innovation performance

The analysis in this section is largely based on the EU 27 Eco-innovation scoreboard (Eco-IS). Eco-IS via

its composite Eco-innovation index demonstrates the eco-innovation performance of EU27 countries

compared with the EU average and with the EU top performers. Eco-IS is based on 13 indicators which are

aggregated into five components: eco-innovation inputs, eco-innovation activities and eco-innovation

outputs as well as environmental outcomes and socio-economic outcomes

Figure 2.1 EU27 Eco-innovation scoreboard, composite index

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Figure 2.2 Eco-innovation composite index components

As stated in the figures above the Czech Republic is at the 15th position in the EU27 member states Eco-

innovation scorebaord. The country‟s performance is around 30% below the EU27 average and half of the

performance of the eco-innovation leaders like Finland and Denmark.

According the area of eco-innovations there is no statistical background in the Czech Republic. As this area

is newly developing and the state support of eco-innovations is more or less sporadic, the overall

performance can be evaluated based on some selected related indicators.

Eco-innovation inputs

The eco-innovation input index is based on the national indicators of Cleantech investment, R&D

personnel, and environmental and energy R&D expenditure allocation. In this index the Czech republic is

aorund 25% below the EU27 average and even more far behind the EU15 average.

According to the Cleantech Group (2010) records, €43.3m has been invested in green technology projects

in the Czech republic in 2007-2009. In this respect the country performs much better than other Eastern

European Member states, but it is still far below the development in old EU Member States. Overall in this

indicator the Czech Republic scores half of the EU average value.

According to the national statistics in 2008 the governments environmental and energy R&D appropriations

and outlays are around 0.03% of GDP while the EU average is 0.04% and in the best performing countries

like Spain and Finland it reaches 0.08-0.10% of GDP.

The total R&D personnel and researchers in percentage of total labour force and total employment was at

1.41% in Czech Republic in 2007 almost on the same level as the EU27 average (1,45%).

Overall it has to be noted that the main constraint in the sphere of eco-innovative inputs come from the

insufficient co-operation between the R&D institutions and the private sector (reference: interview). Also the

lack of venture capital and economic stimuli (subsidies, taxes, amortization) is preventing the progress in

eco-innovation performance.

Eco-innovation activities

The eco-innovation activities index is based on the statistics of companies with EU Eco-Management and

Audit Scheme certificates (EMAS) and their innovative performance aimed at material efficiency sourced

from the community innovation survey (CIS). The Czech Republic scores 70 which is 30 point below EU27

average level.

The number of EMAS registered organisations is rather low (circa 20% of the EU average). On the other

hand there were 4684 companies certified by the ISO 14001 in 2009 (ISO Survey, 2009), which moved the

Czech Republic to be on the 10th. position of number of ISO 14001 certificates in the world in 2009.

ISO14001 is evidently much more popular than EMAS in CR and there is a positive trend which was not

captured in the sub-Index.

In terms of innovations targeting reduction of material and energy use and based on (CIS) results for the

period 2006-2008 more than 28% of innovative enterprises in Czech Republic indicated that their

innovation contributed significantly to the reduction of material and energy use per unit output. In this

indicator the country performs above EU average level.

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In the period 2006-2008, innovative firms in the country focused mainly on eco-innovation in the field of

recycling of waste, water and materials. The share of companies that have implemented this type of eco-

innovation, has reached 42% of the total number of innovative firms. The second most frequently

implemented eco-innovation was the reduction of energy consumption per work unit (30.8% of innovative

enterprises). The least implemented form of eco-innovation was the reduction of CO2 emissions in the

company (mentioned by 17.3% of innovative enterprises).

The relationship between the size of companies and their eco-innovation can find this rule: the larger the

enterprise the greater the initiative to introduce eco-innovation. The implementation of eco-innovations

such as recycling of the waste water and materials held 54.4% by the large innovative enterprises, 46.5%

by the medium-sized enterprises and 39.6% of small enterprises.

Eco-Innovation outputs

Eco-innovation outputs are measured in patenting outputs in pollution abatement and energy efficiency

fields on the national level. Number of patents in terms of the share of eco-innovation patents by one

million of population the Czech Republic in 2007 was at 59% of the EU27 average (OECD, 2010).

The relatively low performance of the Czech Republic regarding this indicator is probably obsolete,

concerning the big boom of the energy efficiency related issues in CR, it is possible that this performance

grew rapidly in the last two years.

Environmental outcomes

The sub-index of environmental outcomes consists of three major components: statistics on domestic

material productivity, domestic water productivity, inland energy productivity, and GHG emissions intensity.

The Czech Republic scores 67, while the EU27 average is 100, and leading countries Luxemburg and the

Netherlands score over 146. Nevertheless, it is necessary to recognize that the performance of the Czech

Republic in these indicators have generally been positively progressing over the last decade.

Water productivity of the country in the year 2001 was 8.79 €/m3 which is 75% of the EU27 average (11.32

€/m3). Data for more recent years is not available therefore it is difficult to assess the trends since 2001.

Based upon the information from MoEnv the water withdrawal had a decreasing trend since 2001, which

could affect also the performance of CR in this indicator.

The material productivity (GDP/Domestic Material Consumption) in the Czech Republic in 2007 was with

1.05 €/kg which is 70% of the EU27 level (1.47 €/kg). Nevertheless based on the rather steep rising

tendency since 2000 (0.73 €/kg) the improvement of this component can be expected.

The energy productivity in 2008 was 4.66 €/toe which is at 67% of the EU27 average (6.63 €/toe). This

indicator has been improving over the last decade (e.g. in 1995 it was on the level of 2.67€/toe). Along with

this improvement in energy productivity the carbon intensity of the economy has been declining from 1.28

kgCO2 equivalents per each euro of product in 1995 to 0.27 kgCO2 eq/euro in 2008.

Socio-economic outcomes

This indicator is based on the performance of „eco-industries‟ and includes export, employment and

turnover statistics. Eco-industries include companies working in such areas as waste management, water

supply and treatment, material recycling, renewable energy, air pollution, biodiversity, and soil,

groundwater, noise pollution areas.

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The country‟s eco-industries‟ export values were €183.22m in 2004. The share of eco-industry goods in

total export of Czech Republic was about 0.38%; to compare, the EU27 average performance in this

indicator was 0.63%. The overall turnover of the Czech eco-industries in 2004 was €1727m. The share of

eco-industry turnover in the GDP was 1,96%. This is around half of the EU27 average for this indicator.

The share of eco-industry employment in the total Czech workforce at 1.89% was much higher than the EU

average (1.49%) in 2008. This can be explained by increased investments (largely via the EU Structural

Funds) and activities on upgrading the environmental infrastructure.

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Part 3. Leading eco-innovation areas

Effective Waste Management

Waste is not only an epiphenomenon of the non-efficient treatment of non-renewable natural resources, but

it is also a resource of raw materials and energies of increasing importance. Waste disposal and

incomplete combustion of waste represent a pollution source for soil, water and air by hazardous

substances (toxic metals and persistent organic pollutants, etc.).

Waste management is a modern cross-technology field. It concerns both production and consumption and

includes raw material extraction and processing, manufacturing and product consumption. It focuses on

minimisation of waste production, efficient material and energy conversion of waste, and deals with waste

treatment and disposal.

In the Czech Republic the hierarchy of waste disposal is provided in Act No. 185/2001 on waste.

Minimisation of waste production and increasing the recycling rate is limited by economic potential and

require not only new economic incentives, but mainly changes in the behaviour of producers and

consumers. The need for reducing environmental burdens and the abatement supply of primary raw

materials make it essential to recover reusable materials from waste. That is why there is relatively fast

growth in the number and capacity of recycling facilities in the Czech Republic. Most eco-innovative

technologies applied in Czech Republic in waste management regard waste as a raw material.

Technologies aimed at extraction selected materials from waste, technologies for recovering precious

substances (such as precious metals) and technologies for processing biodegradable waste all contribute

to the material utilisation of waste.

RES - Small Hydro Power Plants

Hydro power plants are the most expandable facilities for energy generation from RES in the Czech

Republic. Their advantage is their flexibility and quick start thanks to the accumulation of water energy in

reservoirs. Therefore, they significantly contribute to maintaining the balance between the generation and

consumption of electricity in energy grids.

The share of HPP in electricity generation from RES fluctuates; generation is strongly dependent on

watercourse accumulation throughout the year. Today, the annual volume of electricity deliveries from HPP

hover around 2.5 TWh per year in the Czech Republic. The construction of large dams significantly impacts

the landscape and local ecosystems, and it changes microclimatic conditions in surrounding areas.

Therefore, it is impossible to assume a considerable increase in the number of large HPP in the future.

However, the development of technologies for small water heads and direct flow micro and small HPP,

which do not significantly influence waterways and water wildlife, is being supported. Thus, water energy is

an energy source being looked at by small investors to deliver electricity. These projects are eligible for

financial allowances known as green bonuses.

In addition to large HPP (above 10 MW), 536 small HPP exist in the Czech Republic, and this number is

still increasing. ČKD Blansko Holding a.s., delivers turbines not only in the Czech Republic, but throughout

Europe, Asia and America. It is one of the most prominent producers of turbines and equipment for small

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HPP. The company produces all types of turbines. The company also has its own research department

studying water equipment and a hydraulic testing department. There are only a handful of organizations in

this field worldwide.

Nanotechnologies for green purposes

The Czech Republic has a growing interest in the area of nanotechnology, which is evident in the growing

number of science institutes, universities and private entities that are dedicating themselves to this field.

Most of them operate with unique technologies and achieve noteworthy research findings

(czechinvest.org). There is a special Czech funding programme “Nanotechnology for Society”, supporting

projects focused on nanotechnology.

Czech nanotech companies and research institutions specialise in a wide range of technologies and areas.

Some of the technologies have a promising potential in addressing environmental problems and bringing a

breakthrough solutions for green technologies. For example Nanospider technology, which is industrial

production of nanofibres and derivatives, can provide alternative material for solar and wind energy

technologies, and used in waste processing (see example below). Technologies based on iron

nanoparticles ensure excellent water treatment. Another nano-technology allows surface and antibacterial

treatments.

Good practice examples

Example 1: The recycling of plastics

1. Description of product/technology/service/business modes

In the Czech Republic, the recycling of plastics is performed either from mixed plastics or sorted plastics, e.g. PET bottles, waste from the manufacture of plastics, etc.

Mixed plastic waste recycling is performed by Transform a.s. in Lázně Bohdaneč. They treat sorted plastics from communal waste. The waste is crushed, ground or in the case of film, agglomerated and mixed in suitable proportions to make a product of required properties. The pre-treated mixture is then

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used to produce glass blocks, flowerbed pavements, fence planks, cable gutters of various dimensions, transport pallets, boards, planks and various bar profiles.

These products are resistant to weather, have good mechanical properties, are not moisture-absorbent, are chemically inert, are lightweight and are fully recyclable.

In the Czech Republic, the production of polyester grain fibres obtained through the processing of PET waste is performed by SILON s.r.o. in Planá nad Lužnicí. After the initial treatment, PET waste is partly melted and after the desired properties are achieved, it is jet-injected into a conditioning shaft where the material cools down. The next steps depend primarily on the requirements for the final product (polyester staple, PET strap, PET film, etc.). During the manufacture of polyester fibres (TESIL® polyester fibre), known especially for the production of clothing, the fibres are further stretched to a thickness suitable for use in the textile industry.

2. Determinants:

- barriers: separation of the PET basis from the mixed plastic waste

- drivers: low price of the raw waste

3. Sustainability effect In 2008, TESIL® polyester fibre was awarded the European Union eco-label and the Environmentally Friendly Product label for textiles. Eco-labelling is a voluntary instrument for environmental protection. Eco-labelled products are not only more environmentally friendly through all stages of their life, but are also healthier for consumers.

Example: Production of nano-fibres (http://www.elmarco.com)

The Nanospider technology developed by the Technical University in Liberec is unique in the world. It is the only technology that enables the industrial production of nano-fibres and are able to produce millions of square meters of nanofibrous materials every year. The Czech company Elmarco has become the industry‟s first supplier of equipment for industrial-scale production of nanofibres based on the patent of the Technical University in Liberec.

Nano-fibres have a great potential in many applications and industrial production is the key to their use in environmental protection. The considerable porosity and high surface and volume coefficients of nano-fibres offer extraordinary options for use in membrane technologies. Molecules, macromolecules and cells may be connected by nano-fibres and such modified nano-fibres may be subsequently used in many areas from waste processing to chemical analysing

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and diagnostics through the use of biosensors.

Furthermore, nano-fibres may be used in producing energy from renewable resources. Nano-fibres can replace both classical silica cells and the new generation of cells with nano-composites. They also enable operation in aggravated light conditions (no sunshine) and the use of mobile power sources (the combination of solar cells with batteries for nano-fibres).

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Part 4. New trends: areas on the rise

It may look like there are not many new eco-innovative areas in the Czech Republic considering the low awareness rising activities and national support from the side of Czech governmental and state institutions. E.g. in the Czech National patent office there is no data about the environmental services and eco-innovations available openly. However despite the fact, that the eco-innovations are rather poorly promoted

in the Czech Republic, there are couple of areas on the rise in the field of eco-innovations.

Increasing energy efficiency and energy savings (CENIA, 2009)

In the Czech Republic, energy saving projects are supported from subsidy programmes of the State

Environmental Fund, the Ministry of Industry and Trade and the Ministry for Regional Development. In April

2009, a programme supporting renewable energy sources and energy savings in residential buildings was

launched. This programme is financed from the sale of emission credits entitled Green for Savings. It is the

largest environmental subsidy programme designated to Czech households in the history. Its aim is to

support selected measures implemented in residential buildings by individuals and other entities that own

residential buildings. The measures will both immediately reduce CO2 emissions and start a long-term

trend of sustainable construction. Thanks to the Green for Savings programme, Czech annual CO2

emissions will be by more than million tonnes lower and dust particle emissions will decrease by 220 000

kg. Individual sub-programme are focused on external insulation of buildings, replacement of

environmentally unfriendly heating with low-emission biomass sources and efficient heat pumps,

installation of biomass sources and efficient heat pumps in new buildings, installation of solar and thermal

collectors and development of passive houses.

Environmentally Friendly Motor Transport

The road traffic is one of the main factors that affects the quality of the environment, especially air. Its

negative effects are mainly seen in such emissions as greenhouse gas, suspension particles, nitrogen

oxide and volatile organic substances, which are the precursors of ground-level ozone. The implementation

of environmentally friendly technologies in transportation has been helping in reducing CO emissions. They

have already helped to reduce CO by more than 30% since 1995. This is mainly the result of the more

efficient combustion of fuels and catalytic systems. The implementation of biofuels also contributes to

reducing specific emissions of CO2 in CR. However, it is necessary to keep in mind in this context that road

transport volumes and outputs have increased significantly since 1990 and future growth is anticipated.

In the Czech Republic there are few examples of new cleaner transport technology developments such as

hydrogen fuel vehicles, more efficient low-rolling resistance tyres, etc., which are to be introduced in

the market in coming years. These novel technologies can help in mitigating the increasing burdens of

current and future emissions. If the potential of new technologies in transportation is not used, the

stipulated limits for pollutants and noise limit values will be exceeded more frequently, which will threaten

the peoples' health, especially the ones leaving in municipal agglomerations. Below is the detailed

description of the development of the upcoming eco-innovative technologies in transportation implemented

in the Czech Republic and the potential of their use.

Additional areas of eco-innovations are bulleted below, in case of interest the detailed information these

can be traced in the mentioned sources.

Sustainable building materials (straw houses) (http://www.slamenedomy.cz/)

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Photovoltaic technologies (despite the fact, that the extortionate prices for buyout of electricity from photovoltaic plants led to the massive investments to huge PV fields and to the risk of increase of price by the end-users, the photovoltaic can be perceived as very promisingly developing area. (http://energie.tzb-info.cz/fotovoltaika/7241-soumrak-fotovoltaiky-v-cesku-a-na-slovensku-nebo-ta-spravna-regulace-trhu)

Example 1: Hydrogen technologies (http://www.trihybus.cz, 2010)

Description of the emerging eco-innovation:

The first hydrogen-propelled bus in the Czech Republic is being developed at Škoda Electric a.s. in cooperation with foreign partners. Its concept is based on trolley buses produced by the same manufacturer. The main power source is a fuel cell with secondary traction batteries and ultra-capacitors. Hydrogen is stored on the vehicle‟s roof in high-pressure containers. A control system allows for energy recovery in secondary resources and its reuse during acceleration. Board indicators will also include a presentation for passengers that will provide an easy-to-understand explanation of the function of individual components and at the same time will display the instant and overall savings of pollutant emissions. The bus will be operated within the public mass transport system in Neratovice, where the first Czech hydrogen filling station will be put into operation for this purpose. The main partner is Linde Gas a.s., which will provide fuel supplies in the future.

2. Determinants:

- barriers

lack of the H2 pumping stations

completely new technology with high investment costs

- drivers

increasing need for cleaner vehicles with low fuel consumption

profit from commercialisation

3. Sustainability effect Use of hydrogen drives means almost zero gas emissions. For example, a twelve cylinder engine in a BMW Hydrogen 7 vehicle, which allows for the combustion of hydrogen and petrol, produces only 5.2 grams of CO2 per kilometre if fuelled by hydrogen. The use of hydrogen drives currently has many technical problems starting with the need to liquidize hydrogen and keep it in liquid state. In the Czech Republic, the gradual expansion of the use of hydrogen drives is planned over the long-term. As with other alternative fuels, legislative support, the selection of vehicles and the establishment of sufficient infrastructure is necessary.

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Part 5. Public policy in support of eco-innovation

In Government Resolution of February 22, 2006 No. 181, the government of the Czech Republic approved

the Programme of Support of Environmental Technologies in the Czech Republic (hereinafter referred to as

the “Programme”), which was prepared based on a recommendation of the European Commission that the

member states should prepare national plans of ETAP implementation. The objective of the programme is

defined as the coordination of support of environmental technologies and a contribution to ETAP

implementation under the assumption that specific measures will be reflected into the policies and

programmes of individual ministries. The Programme focuses on the maximum possible utilization of the

potential offered by environmental technologies with the goal of reaching as high reduction of the

environmental impact as possible.

At the beginning of 2009, the Ministry of Environment of the Czech Republic prepared a document on the

update of the Programme of Support of Environmental Technologies in the Czech Republic (hereinafter

referred to as the “Update”), which was approved by government on July 20, 2009. The document stresses

the issue of eco-innovations and the suggested measures reflect the impact of the global financial and

economic crisis. For next period, the Update proposes priorities for reducing the emissions of greenhouse

gases and air-polluting elements (with an emphasis on the integrated approach), the reduction of the

quantity of produced and discharged waste water, a decrease of the quantity of produced waste and the

repeated use of waste. The sector priorities are energy production, transport and the manufacturing

industry. The Update proposes 17 specific measures (listed below) at four levels of public administration.

1. Measures requiring new legislation or amendments to the law:

to set parameters of the tax and fee systems so that they support the development and increase in the efficiency of environmental technologies and to stimulate demand for environmentally friendly products and services,

to increase the share of purchased environmentally friendly products and services in public procurement.

2. Measures requiring the approval of the Government (decrees, government resolutions):

to increase the energy efficiency in production and consumption,

to support the utilization of renewable energy sources in the production of heat and in heating.

3. Measures requiring an agreement between two or more ministries:

to strengthen environmental criteria in Operational Programmes,

to support more extensive utilization of energy contracting in the Czech Republic as a part of the State Programme of Support for Energy Savings and Usage of Renewable Energy Sources,

to propose a benchmarking system for environmentally relevant (in particular energy- and resource-intensive) products and technologies, taking into account the LCA,

to set priorities for eco-innovations in implementing the Research Programmes of Ministry of Industry and Trade, Ministry of Agriculture and Ministry of Education ,

to place greater emphasis on cooperation with the commercial sector in the system of R&D support in general and in particular in the area of eco-innovations,

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to support the mobility of people involved in R&D among various research organizations and businesses in the area of eco-innovations,

to create a system of support for funding test phases of eco-innovations and the first (reference) versions of eco-innovative technologies,

to increase the availability of capital for eco-innovative projects of small and medium-sized businesses,

to give an impulse to the establishment of an interest group (cluster) representing the sector of environmental technologies and eco-innovations,

to create a generally accessible registry of R&D projects for eco-innovations.

4. Measures at the discretion of the MoE:

to maintain a registry of selected environmentally harmful public support in the Czech Republic,

to develop tools and to secure a sufficient structure, expert and organizational capacity for assessing and verifying environmental technologies,

to prepare indicators for assessing and verifying environmental technologies based on the unified European system of Environmental Technology Verification, taking into account the LCA.

Regarding the recent legislation, the eco-innovations are indirectly pronounced in the following acts:

Green Public Procurement o Act No. 40/2004 on public procurements

Government Resolution No. 720/2000 on the proposal to support the development of sales and use of environmentally friendly products. Government Regulation No. 197/2003 on Waste Management Plan of the Czech Republic Act No. 406/2000 on Energy management

Waste management o Act No. 185/2001 on waste as amended o Waste Management Plan as published in the Government Regulation No. 197/2003

Air protection o Law No. 86/2002 on the protection of air as amended o Regulation No 372/2007 on the national programme to reduce emissions from

existing very large combustion sources

Climate change o Act No. 695/2004 on conditions for emissions trading as amended

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Part 6. Understanding eco-innovation performance

Barriers

It can be said that the specific ministries of the Czech Republic have prepared and are implementing the necessary supporting activities for environmental technologies, but they are at the very beginning regarding the support of eco-innovations. There are problems on the sides of both supply and demand. From this point of view and based on the surveys (Integra Consulting Services s.r.o., 2008) performed among small and medium-sized enterprises the main barriers in the Czech Republic are as follows:

The greatest problem on side of demand for eco-innovations is the fact that the public sector, whose expenditures represent about 30% of the total final consumption, does not demand environmentally beneficial products or services to a sufficient degree. The problem is even more pronounced for households, whose share in the total final consumption amounts to almost 70%. Citizens who would be potentially interested in eco-innovative activities and potential consumers do not have sufficient market impulses

the state support for eco-innovations is not systematic, effective and coordinated, the support shall be developed after the proposed update of the Programme of Support of Environmental Technologies in the Czech Republic starts to be implemented. Recently on one hand the complexity and on the other hand low transparency of environmental legislation and inconsistency of its implementation (insufficiently stimulating environment for establishment and demand for eco-innovative solutions) is the main barrier from the legislative point of view

the cooperation between research and development institutions and the private sector is not sufficient

the absence of venture capital and economic stimuli (subsidies, taxes, amortization)

Based upon the latest Flash Eurobarometer report the main three barriers perceived by the Czech entrepreneurs are:

- Lack of funds within the enterprise - Uncertain return on investment - Uncertain demand from the market

However all these barriers were maked to be “serious” or “somewhat” serious by less than 70% respondents, therefore the is probably no predominant barrier in this area at all.

Drivers (Interview Kolář, CENIA)

From the legislative point of view the main driver for eco-innovations in CR is recently the Act no. 76/2002 on integrated pollution prevention and control, integrated pollution register as amended (Act on Integrated Prevention), which i.a. governs the permitting process and provides an integrated process of information exchange on best available techniques (BAT). This act fully implements the Directive 2008/1/EC. However as drivers we can see also requirements on industry stated in other environmental legislation – such as in Air pollution Act, Act on waste, Water Act, ...

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Two additional however not explicitly mentioned drivers are the evaluative criteria of specific ministries used for the subsidy approval process under the Operational Programme Enterprise and Innovation (OPEI) at the Ministry of Industry and Trade and R & D programs.

Based upon the latest Flash Eurobarometer report the main three drivers perceived by the Czech entrepreneurs are:

- Good business partners - Expected future increases in energy prices - Current high material price

However the overall perception of these drivers to be “very important” is less than 40% in all cases. This situation occurred by only two from twenty seven surveyed countries, in more than 60% surveyed countries the main driver‟s “VI” perception exceeded 60%. If this fact could be further analysed, this can tell a lot about the overall perception of eco-innovations in the country itself.

The eco-innovation technologies that have been emerging in the Czech Republic so far were pushed by several factors, which, however, have been effective in specific technological domains and cases. The most common drivers of eco-innovations in the country are:

Growing international demand for specific green technologies

EU and national funding invested in certain projects made possible success stories to emerge

Commercial interest of technology producers and expected profit

Furthermore, the 18 specific measures proposed under the 2009 update of the Programme of Support of Environmental Technologies (described above) can become the drivers steering the development of the future eco-innovations. The approval of the measures proposed in the Update will have a substantial positive impact on the fundamental elements of the environment because it will decrease the resource and energy dependency of the economy and decrease the emission of greenhouse gases and of air-polluting substances, reduce the quantity of discharged waste water and of produced waste. This way, it will help to fulfil the international obligations that the Czech Republic accepted or plans to accept in the environmental area (especially the obligations following from the package of climate and energy measures or national emission ceilings for some polluting substances). In addition, the proposed measures will strengthen the energy and – in part – resource sufficiency of the Czech Republic.

From the economic point of view, the approval of the proposed measures will strengthen the desirable (and, to a considerable degree, missing) cooperation between R&D institutions and the private sector and will thus shift the Czech Republic closer to a knowledge-based economy. In addition, we can expect that new jobs will be created by strengthening the segment of small and medium-sized companies.

Many of the proposed measures in the Update will also mitigate the impacts of the current economic crisis. They are mostly measures focusing on stimulating the demand for environmentally friendly products and services, on increasing the energy efficiency and utilizing renewable energy sources, developing new technologies, strengthening R&D institutions and their cooperation with the commercial sector and funding the development of eco-innovation and facilitation of their transfer into the practice.

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References

- MoEnv CR, 2009: “Report on the Environment in the Czech Republic in the year 2008” - CENIA, Czech Environmental Information Agency, 2009: “Environmental Technologies and

Eco-innovation in the Czech Republic” - Interview: Ing. Jiří Študent, executive director of The Czech Environment Management Center - http://www.iso.cz/ - ISO MSS certificates survey 2009 - Integra Consulting Services s.r.o. Pilotní průzkum potenciálu a bariér rozvoje eko-inovací u

malých a středních podniků v ČR, Ministerstvo životního prostředí , říjen 2008 - Ministerstvo životního prostředí Praha 2004. Státní politika životního prostředí České

republiky 2004 – 2010 - Czech Statistical Office: Innovation activities of enterprises in the Czech Republic in 2006 -

2008 (2009) - Cleantech Group (2010), international data on venture capital investment in cleantech

projects - Interview: Kolář Jan, CENIA, Dpt. of IPPC and EIA - Eurobarometer: Attitudes of European entrepreneurs towards eco-innovation; Analytical

report (EC, March 2011)